Carryon Regardless Posted February 27, 2021 Report Share Posted February 27, 2021 https://www.bbc.co.uk/news/uk-56218952 With the extension of the stamp duty holiday (the only holidays available at the moment). This could encourage buyers to buy, but with CGT hits not so much 'us' sellers to sell. It seems some are considering a sale here or there. Gifting the 5% would mean 100% funds for a buyer, and upping the price a tad could compensate that some. Quote Link to comment Share on other sites More sharing options...
Richlist Posted February 27, 2021 Report Share Posted February 27, 2021 We are selling a property at the moment. We have an FTB that has saved up a large deposit so the Gov' offer of 5% is unlikely to affect them. Even if it did it would only be good news for the buyer......I'm still faced with a large CGT bill at current tax rates. It'll be even worse if CGT rates are increased in the budget next week. We paid over £20K last year, nearly £25K the year before, it's become a ridiculous situation. Quote Link to comment Share on other sites More sharing options...
Carryon Regardless Posted February 27, 2021 Author Report Share Posted February 27, 2021 In truth RL why it feels ridiculous because we have become used to CGT being so lenient. Over the last decade or two the leniency has been gradually eroded. There used to be taper relief, and another one I forget the name of now. A sort of demonstration that whichever flavour of Gov't we have become more an more socialist. The continual attack on the LL (to favour the lesser able and / or willing) supports that in my view. I am discussing with Mrs Me if this could be an opportunity to off load these ever increasing units of responsibility (that are questionable as to if they will still be viewed as assets in a few years). Our situation is far and away different from most of you fortunate persons, but the damn things (for now) still seem to offer possibility of a pension. And where in the world to live and replace (or create) that is a difficult one. All Western economies will have to tax the Plebs heavily in the recovery post covid. Asian countries (as a vague general) are less affected, but their infrastructure is less reliable. Although I have viewed our infrastructure protections are more artificial than real. "We've been broken into." "Here is a crime number for your insurance claim." "Can I have an Ambulance." "We're very busy, sometime tomorrow." "Some one has emptied my bank account." "I think you will find that that will be your own fault." Quote Link to comment Share on other sites More sharing options...
Melboy Posted February 27, 2021 Report Share Posted February 27, 2021 7 hours ago, Carryon Regardless said: In truth RL why it feels ridiculous because we have become used to CGT being so lenient. Over the last decade or two the leniency has been gradually eroded. There used to be taper relief, and another one I forget the name of now. A sort of demonstration that whichever flavour of Gov't we have become more an more socialist. The continual attack on the LL (to favour the lesser able and / or willing) supports that in my view. I am discussing with Mrs Me if this could be an opportunity to off load these ever increasing units of responsibility (that are questionable as to if they will still be viewed as assets in a few years). Our situation is far and away different from most of you fortunate persons, but the damn things (for now) still seem to offer possibility of a pension. And where in the world to live and replace (or create) that is a difficult one. All Western economies will have to tax the Plebs heavily in the recovery post covid. Asian countries (as a vague general) are less affected, but their infrastructure is less reliable. Although I have viewed our infrastructure protections are more artificial than real. "We've been broken into." "Here is a crime number for your insurance claim." "Can I have an Ambulance." "We're very busy, sometime tomorrow." "Some one has emptied my bank account." "I think you will find that that will be your own fault." Quote Link to comment Share on other sites More sharing options...
Melboy Posted February 27, 2021 Report Share Posted February 27, 2021 There used to be taper relief, and another one I forget the name of now. "Rollover" COR I'm waiting for the Budget next Wednesday before making any final decisions on selling BUT if Rishi Sunak takes away the current £12,300 CGT allowance per person to zero or drops it to around the £5k mark then I am not selling. Quote Link to comment Share on other sites More sharing options...
Melboy Posted February 27, 2021 Report Share Posted February 27, 2021 7 minutes ago, Melboy said: Quote Link to comment Share on other sites More sharing options...
Richlist Posted February 27, 2021 Report Share Posted February 27, 2021 Assuming your property is in a single name and you are a 28% CGT payer, if the allowance is reduced to £5000 the changes you mention will cost you an extra £2044. Thats obviously not good news but it's not a sum of money that would persuade me to change my mind about selling. The only certainty is that if you wait until next year to sell your tax bill is very likely to be even higher. Quote Link to comment Share on other sites More sharing options...
Melboy Posted February 28, 2021 Report Share Posted February 28, 2021 True RL but I shall wait and see what Wednesday brings by way of tax rises for me. The person who has moved into my property last week is keen for me to sell it to them but no promises have been made in that respect. I did hear a faint rumour of interest rates rises in the near future. Quote Link to comment Share on other sites More sharing options...
bil8999 Posted February 28, 2021 Report Share Posted February 28, 2021 Scenario, lease the properties to son/daughter at an amount that would fund the lifestyle you are after, he or she can keep the rest as payment for looking after the properties, and to expand on the portfolio for the future. Any shortfall comes out of there payment, that would create the incentive for them to keep the properties occupied. No cgt Just a thought Quote Link to comment Share on other sites More sharing options...
Phkarentel Posted February 28, 2021 Report Share Posted February 28, 2021 16 hours ago, Melboy said: The CGT isn't going to the "lesser able" it's going into the pockets of a greedy state controlled right wing goverment Quote Link to comment Share on other sites More sharing options...
Carryon Regardless Posted February 28, 2021 Author Report Share Posted February 28, 2021 1 hour ago, Phkarentel said: The CGT isn't going to the "lesser able" it's going into the pockets of a greedy state controlled right wing goverment Wether it be road fund, N.I. or whatever it all goes into the treasury pot. Where it goes from there can be very questionable, especially with the near open corruption MP's are enjoying due to covid. But what is this right wing Gov't you speak of, I don't see it. There are ever increasing policies to relieve any Gov't of responsibility, that can no longer be afforded anyway (aside from covid rescue packages that are going to burden the working classes (whatever that means these days) for longer than I could calculate). The likes of us, but far from only, are the new entities to carry the responsibilities. Gov't's have generally been moving more central. The intelligence there is that when you look at what Labour stands for it no longer has the same meaning or value. Can you say that Blair was left wing? I can't. Corbyn failed trying to be, and now we have that nice Starmer who doesn't seem to have anywhere to place himself. In my view the only right wing aspect of today's Gov't is the looking after your mates bit. But Labour have a similar style. Btw, my comment about the lesser able (or willing) relates to policies that cause us to carry more responsibility for them. The CGT bit is a recognition that it was really a bonus for the well shod, as they were the traditional investors that could afford to. Policies that didn't tax their revenues was historically Tory style and favoured their mates. Every man and his dog can invest in stuff these days, often with a little reprioritizing of outgoings (ok not every man some are hand to mouth), but the Tory / Labour or rich / poor demarcation lines are pretty vague nowadays. Quote Link to comment Share on other sites More sharing options...
Melboy Posted February 28, 2021 Report Share Posted February 28, 2021 3 hours ago, bil8999 said: Scenario, lease the properties to son/daughter at an amount that would fund the lifestyle you are after, he or she can keep the rest as payment for looking after the properties, and to expand on the portfolio for the future. Any shortfall comes out of there payment, that would create the incentive for them to keep the properties occupied. No cgt Just a thought I did think about doing something like that but couldn't really work out how it could be successful with me taking part of the rental income. Let's face it.........I'm a control freak! 😃 One of the reason I am self employed is because I rise and fail by my own decisions and I am answerable to nobody......'erm.... except to Mrs. Melboy. 😄 Quote Link to comment Share on other sites More sharing options...
Carryon Regardless Posted February 28, 2021 Author Report Share Posted February 28, 2021 I don't see you need people for that. Your controlled (in whatever fashion) limited company could lease from you. Wages can be paid to whoever for what ever. Dividens can be apportioned as available. Quote Link to comment Share on other sites More sharing options...
bil8999 Posted March 1, 2021 Report Share Posted March 1, 2021 17 hours ago, Carryon Regardless said: I don't see you need people for that. Your controlled (in whatever fashion) limited company could lease from you. Wages can be paid to whoever for what ever. Dividens can be apportioned as available. the idea behind it is that you can hand over the business to your kids, not just a wage, it gives them the incentive to grow, don't get involved, leave them to run it, maybe with a little bit of background help, get what you deserve to fund your life style, without paying CGT, yes ultimately there will be IHT, if it looks like its not working then sell. I always said i would work on the tools till i was 70, 3 years from now, based on the tax situation i think it will be the way forward for me, daughter will run the business, a guy that has worked with me now for 16 years will look after the maintenance and small building works. I will spend more time in Spain, but still in the background if needed. Quote Link to comment Share on other sites More sharing options...
Carryon Regardless Posted March 1, 2021 Author Report Share Posted March 1, 2021 I don't see any reason why portions of a property can't be transferred. It may well be a slow process but transferring to the company at such a proportion that the CGT isn't passed would mean no tax payable. So an ever increasing share of the property is owned by the company. Then as suits as reward for effort more shares are taken by individuals in the company. In my mind the aim is for the company to own most prior to the present owner of the properties snuffing it. Up to the IHT threshold ideally. The rate at which ownership of the company is taken over is less of a pressure as the kids are expected to live longer. The same with shares in the company. Does capital transfer tax calculate as additional to CGT, or is it viewed as separate by HMRC with an nonindependent threshold. Although if I remember the pre tax allowance is very small for that but It may be possible to gift some to individuals, annually. I'm sure my off the cuff thoughts require more consideration. Quote Link to comment Share on other sites More sharing options...
Richlist Posted March 1, 2021 Report Share Posted March 1, 2021 There are a lot of assumptions there. I'd be very surprised if a loophole such as described actually exists. Best to seek professional advice. Quote Link to comment Share on other sites More sharing options...
Carryon Regardless Posted March 1, 2021 Author Report Share Posted March 1, 2021 1 hour ago, Richlist said: There are a lot of assumptions there. I'd be very surprised if a loophole such as described actually exists. Best to seek professional advice. Absolutely. But we may transfer part of a property at will. We will do this at a sale when we gift 50% to a spouse to double the CG threshold advantage. No tax on gifts / transfers between spouses. Clearly it is different gifting, or transferring for what ever reason (is really a private matter) to a company. It may well be as a loan to the company that is carried over each year, increasing annually. Then there would be IHT as a consideration come the time. At any point we may have a share in a property with any partner. Mr Taxman asks us to declare that proportion each year. Why shouldn't that proportion alter annually according to circumstances and agreement? Companies gift shares to interested parties regularly. It is assumed this would have a recognized value so accountable for tax. But really it might be seen as advantageous to allow the company to hold all stock that it accumulates. The board, the family++, can enjoy benefits as decided at their meetings. Of course each has their individual tax responsibility for those benefits. If the company takes the increasing annual share of properties at a rate calculated to be below CGT threshold (x2 as spouse can do same) the properties are disposed of over time. But me no professional bean counter, and it 'aint something I can do anyways. Quote Link to comment Share on other sites More sharing options...
Nev M Posted March 26, 2021 Report Share Posted March 26, 2021 I don't think any government will be more sympathetic to LL and agree with Carryon Regardless. I fact i think they would be harder on us if that possible. I wonder if there would be a way, where say if you had a tenant that you could make an agreement for them to buy the house from you over a number of years and make more use of the CGT per year. Would be very situational but they could pay rent and a lump sum per year that graduated the rent down the more of house they purchased and place a limit on it of 12.5k / 25k per year (Or whatever CTG threshold exists)... Quote Link to comment Share on other sites More sharing options...
Carryon Regardless Posted March 29, 2021 Author Report Share Posted March 29, 2021 Nice idea but if they decide to relocate there would be issue over who owns what proportion and what rights to it there would be. Perhaps that can be clarified in contract but sounds like being complicated with possible litigation ahead. Then if one part snuffs it it their estate would need to be clarified. Similar issue arises should they fail to continue paying, and how would you then evict a part owner? Quote Link to comment Share on other sites More sharing options...
Richlist Posted March 29, 2021 Report Share Posted March 29, 2021 The issue is the timescale from initial viewing until sale completion. Flats in my area normally take between 4 - 7 months. Now, due to Covid19, we can add another month to the process. Absolutely ridiculous. Quote Link to comment Share on other sites More sharing options...
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